Malaysia Funding problems continue

While all three services of the Malaysian Armed Forces (MAF) have been hoping to extensively replace some of their aging capital equipment - along with improving and upgrading existing hardware - the existing financial and political realities have stalled many plans. Fiscally the Malaysian Armed Forces struggle with the fact that since the 1980s, it has been subjected to an irregular development pace with a number of programs postponed or abandoned at the Malaysian government’s convenience. This is despite such programs being initially agreed to and budgeted for.

19th Mar 2012


 Malaysia

 Funding problems continue


Byline: Dzirhan Mahadzir / Kuala Lumpur

While all three services of the Malaysian Armed Forces (MAF) have been hoping to extensively replace some of their aging capital equipment - along with improving and upgrading existing hardware - the existing financial and political realities have stalled many plans. Fiscally the Malaysian Armed Forces struggle with the fact that since the 1980s, it has been subjected to an irregular development pace with a number of programs postponed or abandoned at the Malaysian government’s convenience. This is despite such programs being initially agreed to and budgeted for. The end result is seen in the current state of all three services - which now themselves in the position of having too much aging capital equipment which needs to be replaced - yet at the same time not having enough funding to cover such in its entirety.

Adding to this problem is the issue of domestic politics, with general elections looming and which must be held by 2013. The Government has adopted a cautious approach to defence spending for the 10th Malaysian Plan of 2011-2015, which sets out all priorities for that period. The Government chose to implement a rolling year to year plan in which funding would only be allocated one year at a time rather than completely allocating funding for the entire five year period at the beginning - as had been done under previous Malaysian Plans.

The rationale for this is likely to be that the Malaysian Government wants to only implement electoral friendly programs prior to the election while continuing with programs that would not win votes until after the election. However disclosing the latter at the outset would not help the Government - hence the rolling year to year plan. Given that defence procurement in Malaysia has been a contentious issue, the overall result has been that for 2011 and 2012, funding for defence procurement has been largely curtailed. This is with the exception of programs that involve significant local participation as in the case of the Army’s indigenous 8x8 AV-8 AFV and the Royal Malaysian Navy’s Second Generation Patrol Vessel – Littoral Combat Ship (SGPV-LCS) program.

For 2012, all three services took significant cuts to their procurement funding. The Army requested MYR1.16 billion (US$372 million) in procurement funding for 2012 but was allocated MYR541 million (US$173 million). The RMN asked for MYR4.39 billion (US$1.4 billion) but only received MYR759 million (US$243 million) and the Royal Malaysian Air Force, having asked for MYR2.49 billion (US$799 million) received only MYR983 million (US$315 million). However the possibility is that these cuts may be due to the looming elections and that once the elections are concluded, the government would make up for such shortfalls by providing additional funding.

In the recent budget estimates for 2012, a monetary figure of the costs of expected military procurement projects for the 10th Malaysia plan period was listed - though this release was only as to the total costs without any details as to the specifics. It should be noted that the total cost listing is based on programs that the Malaysian Armed Forces want to carry out rather than what it would actually receive. This is because each program would be subject to specific approval from the Malaysian government on a case-by-case basis. It is also likely that some of these project costs includes ongoing payments for past procurements such as the SU-30MKM, Scorpene submarines and the A400M. The projected procurement costs were broken down into the three services and a tri-service joint program funding request. For the 10th Plan period, the tri-service equipment procurement requirement programs of the MAF was listed as costing a total of MYR987 million (US$315.3 million.), the Army at MYR7.8 billion (US$2.49 billion), the RMN at MYR10.29 billion (US$3.29 billion) and the RMAF 4.97 billion (US$1.59 billion).

There has been little official documentation stating as to what exactly are the procurement plans that the MAF wish to carry out in the 10th Plan timeframe. However, there have been enough indications via various statements made by Malaysian Defence Minister Dato’ Seri Dr. Ahmad Zahid Hamidi and senior officers of the MAF as to Malaysia’s current and future procurement programs.

Army

The Army’s 2012 budget allocation provides only for committed projects and no new procurements are to be implemented in the timeframe of 2012-2013. Among the activities that have been affected are plans to increase the firepower of the Army’s infantry battalions and artillery regiments, and the procurement of combat net radio systems and air assets. The AV-8 indigenous 8x8 AFV program, which runs from 2011-2018, has not been affected as it falls under the committed project category. The AV-8 will replace the Army’s 6x6 Sibmas Fire Support vehicles and 4x4 Condor APCS and the program calls for 257 vehicles in 12 variants to be built by Malaysian company DEFTECH with the hull based on the FNSS PARS body and Thales to provide the electronic architecture and systems for the vehicles.

Currently, the AV-8 programme is in the final phase of the vehicle design review that is expected to be concluded in June this year. A sealed pattern of the Infantry Fighting Vehicle variant will be produced in November 2012 while the Armored Fighting Vehicle variant will be produced in May 2013 for trials. The other significant AFV program that Malaysia has is a requirement for up to 36 6x6 AFVs for service with the Malaysian UNIFIL force in Lebanon. However as this operation comes under the aegis of the MAF Joint Force Headquarters, the requirements and recommendations for the vehicle to be purchase is now under MAF JFHQ instead of the army.

The Malaysian Army’s ‘Army 2 10 Plus 10’ development program which was initiated in 2004 and covers the timeframe to the year 2020 and beyond aims to transform the service into an ‘Objective Force’. This will be capable of operating in multi-dimensional spectrum of warfare and lays down several development programs, which are expected to, materialized soon.

Among them is the development of the Army Air Corps which is to have three regiments - split between reconnaissance, utility and attack helicopter functions. Currently the Army has the reconnaissance regiment operating 11 Agusta A109s. Initial plans for the utility helicopter regiment was to have it made up of S-61As transferred from the RMAF when they replaced the entire S-61 fleet with EC725s. However the RMAF was only able to obtain funding to buy half of the number of EC725s it required and so needs to retain the S-61s that were to have been transferred to the army. Since then the Malaysian Army has not indicated as to whether procurement of attack helicopters or utility helicopters is the priority, current Army Chief General Datuk Zulkifli Zainal Abidin told the author in March this year that whether the utility or attack helicopter be procured next, will depend on a number of factors. These include future challenges, concept of operations, current threats and the allocation of the required budget and that the army would only decide which would be the priority when the government indicated that the army would receive funding to proceed with either program.

The ‘Army 2 10 Plus 10’ plan also calls for the expansion of artillery capabilities. A third Multiple Rocket Launcher regiment is supposed to be procured under the 10th Plan to complement the 2 Astros II MRL units that were procured under the 8th and 9th Malaysia Plans. However it has been indicted by previous army chiefs that the third regiment of MRLs may not necessarily consist of the Astros II system. Also under artillery capabilities development is the procurement of self-propelled howitzers. The Royal Artillery Regiment is currently studying the technical and operational requirements of such in regard to the Malaysian Army, which is likely to materialized into a procurement requirement.

Royal Malaysian Navy

The approval of the Royal Malaysian Navy’s six ship SGPV-LCS program at a total cost of MYR 9 billion (US$2.8 billion) - which would span the 10th, 11th and 12th Malaysian plan timeframe - means that the Multi-Purpose Support Ship program that has been pending since the early 2000’s is unlikely to gain traction. This will be the case unless the government allocates additional funds. Despite the loss to a fire in 2009 of the Royal Malaysian Navy’s sole amphibious operation capable ship, the Newport class LST KD Sri Inderapura and RMN Chief Admiral Tan Sri Aziz Jaafar repeatedly stating the urgency of the MPSS program and Defence Minister Dato’ Seri Dr. Ahmad Zahid Hamidi also placing strong emphasis on getting the program started , there has been little sign from the rest of the Malaysian government as to when funding will be approved.

In the meantime, despite the approval of the SGPV-LCS program, the RMN has been locked in a protracted battle with Boustead Naval Shipyards, the builders of the ships, together with France’s DCNS, over specifications. The SGPV-LCS, despite the LCS moniker, will be a conventional hull design based on the DCNS Gowind. However, the RMN and Boustead/DCNS differ over the exact weapons and combat systems that will outfit the ship.

The DCNS SETIS combat systems has been said to be the system selected by the Malaysian government for the SGPV-LCS despite the RMN preferring the Thales Tacticos system. This is because Tacticos is already being integrated into the RMN’s two Kasturi class frigates as part of the ongoing SLEP for the Kasturis. Boustead and DCNS have recommended the Mica system for the SGPV-LCS’s surface to air missile but the the RMN prefers the Raytheon ESSM. The RMN is said to want the Kongsberg Defence & Aerospace Naval Strike Missile instead of the MBDA’s Exocet proposed by Boustead and DCNS. This is despite the fact that the Exocet is already a significant part of the RMN’s current arsenal which would thus simplify logistical support. The main gun, which is not a source of contention, is expected to be the BAE Bofors Mk3 57mm. A factor is that Boustead Naval Shipyard’s parent company, Boustead Heavy Industry Corporation has an existing joint venture partnership known as BHIC Bofors Asia.

Beyond the SGPV-LCS would be the upgrade and service-life extension program of the 2 Lekiu class frigates, both of which are close to 20 years of service. The RMN also has a requirement for at least 6 ASW helicopters which will operate off the SGPV-LCS with the US strongly promoting the MH-60R Seahawk to fulfill that requirement - though Eurocopter has also talked about offering a navalized EC725.

Royal Malaysian Air Force

The main focus of the RMAF has been the replacement of its MiG-29 fleet, which will be phased out in 2015. The MiGs are to be replaced by up to 18 MRCA aircraft and the contenders for the replacement are Boeing’s Super Hornet, the Eurofighter Typhoon marketed by BAE, the Dassault Rafale and the Saab Gripen. As has been the case with past Malaysian decisions on fighter aircraft, the indications are that operational performance and capabilities will be secondary to the political and economic considerations in regard to the selection. This makes the eventual winner difficult to determine. Indications are clear though that a decision on the selection will only be made in the post-election period.

The RMAF also has a requirement for 2-4 Airborne Early Warning and Control aircraft. In order to better justify the purchase of such aircraft and ease their budget allocations, the RMAF has lobbied for the AEWC aircraft to be funded on a national project level. This is on the basis that the aircraft in peacetime can also conduct surveillance of Malaysia’s borders and EEZ areas along with assisting other government agencies in various tasks. Northrop Grumman have been strongly marketing the E-2D Hawkeye, though Saab has also been pushing the the Erieye AEW&C system which would be installed on a platform of Malaysia’s choice. Saab has also tied in the Erieye with the Malaysian MRCA requirement, offering it as part of a package with the Gripen - similar to what has been done in Thailand.

Despite the RMAF’s purchase of the A400M and also the EC725 helicopter, both the entire existing RMAF C-130 Hercules fleet and a significant portion of the S-61A Nuri helicopter fleet will continue to be in service and both are slated for an upgrade and service life extension program. The planned upgrades to the C-130s are to be in its avionics. There will also be the installation of a defensive suite, something that has now been of concern to the RMAF given the operational deployments in 2011 to evacuate Malaysian citizens from Egypt and the transport of the Malaysian military medical team to Afghanistan.

While the RMAF will receive 12 EC725s - which will be delivered from 2013 onwards - the number is insufficient for the MAF requirement of 27 medium lift helicopters. Thus the RMAF will retain 15 out of its existing 28 S-61 helicopters when the EC725s are delivered. The 15 helicopters will have their avionics and cockpits upgraded, along with a life-extension program to enable them to operate till 2025.

 


 

Defence Review Asia at a glance